IMF dismisses Ireland’s objections to repaying bondholders; refers to a cost equal to 2% of our GDP as “rather modest”

Meet Craig Beaumont who has been the IMF Mission Chief for Irelandsince March 2011, according to his apparent LinkedIn CV (I say “apparent” because LinkedIn will allow any old rubbish to be published on their website, including bogus CVs – this one looks genuine though). Craig doesn’t have a biographical note or photograph on the IMF senior personnel webpages but there is a photograph of him on his way into Ireland’s Department of Finance, here.

Two weeks ago the IMF held a press conference on Ireland where Craig responded to a question on Ireland burden-sharing the cost of repaying bondholders in zombified Anglo Irish Bank and Irish Nationwide Building Society (now merged and renamed the Irish Bank Resolution Corporation); and this was part of his response “the amount of senior unsecured debt has declined to a rather modest sum so that I don’t think that it makes a material difference.”

In fact, it – the amount of senior unsecured debt – totals some €3bn or 2% of our GDP. . And remember that for Ireland, it is our GNP which is a better indication of national income because it excludes multinational income which is effectively laundered through the Irish tax system, and on a GNP basis, the remaining senior bond payments in IBRC are closer to 2.5%.On 25th January, 2012, Anglo Irish Bank (or more correctly the Irish Bank Resolution Corporation, IBRC) is set to pay €1,250m to unsecured unguaranteed senior bondholders. The bond – reference XS0283695228, details here – was originally issued on 25th January 2007 and despite Minister Noonan’s bold announcements in the US last summer, it is set to be repaid in full; this is largest single payment remaining of the €3bn in total.

So, according to Craig these payments are “rather modest”. Just imagine if Craig turned up in the UK and suggested to the UK government that it pay €36bn (2% of the UK GDP of GBP 1.5tn using current exchange rates) to creditors of bust banks! We probably don’t have to imagine; we already saw theUKreaction to providing a €50bn loan – “loan”,mind you: in other words there’s a good likelihood of getting the money back – to the IMF as part of a €200bn European contribution to a fund to help mostly EuroZone countries. I wonder what the reaction in Paris or Berlin/Frankfurt would be, if it was suggested that a payment by either country to bondholders in a thoroughly zombified bank be made, and that further, such a payment was “rather modest”? 2% of French GDP is about €40bn; 2% of German GDP is about €60bn

And yet when Craig waved away 2% of our GDP as “rather modest”, there was not a peep from our politicians – either Government or Opposition.

Craig will be back in Ireland next week, from 12th January as part of the next troika review of the bailout programme. Maybe he might be called on to provide a further explanation of his “rather modest” comments.

Useful graph. The “profit” could have been a lot more. The decrease in price links to the tough-talk of FG and Labour in the run up to the election. At any time over the past few years the Irish gov could have talked the prices down further.

Only those who bought at a price below 60 will be getting the 60%+ profit. The link you provide has great price data but the volume data does not seem so complete.

Based on what can be seen it seems that the reported volume was never above 50,000 units per day when the price was around 60. For a bond with 12,500,000 units that is less than 0.5%. Even if this happened for 20 days there still be only 10% of bond purchased at this price (provided there is no overlap of sales).

This doesn’t make repaying this bond any more palatable not every holder is getting the bumper profit to which you refer.

I understand the point you make – that’s why I used “profit”. The Government should have redeemed the bonds at about 60 but didn’t so all holders effectively gained 60%+ because of the Government’s inaction as instructed by the ECB.

The IMF is reverting to type. They know from the figures in the last review that the growth shell game is up and the only way to get the banks money back now is to squeeze Ireland until the pips squeak.

By 2016, this country will end up paying 35%+ of its total income towards paying the national debt, just as it did in the 1980s. By then, most of that debt will be owed to the EU/IMF and most of it will in fact be purely sovereign debt, and not related to the likes of Anglo or the rest of the banks. It will be purely debt from living beyond our means.

So as far as the IMF is concerned, the Anglo payments are simply amount to one years deficit payments or so, and what’s one year to a country that will be in an IMF programme for at least a decade?

Well, we have no respect for ourselves, so why would we think that Craig Beaumont and his buddies at the IMF would have more respect for Ireland than our own government ministers. All they are doing is frog marching us to our own tune!

@BF excellent point on redemption of bonds,that would fall under the remit of NTMA.Nearly chocked on my cornflakes this week,John Corrigan at NTMA is entitled to stuff his trousers with 500,000 a year,yep HALF A MILLION A YEAR.
Ireland is now again being used and violated,at least get the names of the ‘john’s’.That would fall to the NTMA,they have the muscle and contacts,WHEN in the far distant future Ireland returns to the bond markets it will be under the NTMA.
Every two bit working girl taking it like this without lubricant,would exchange a few words with her regular clients.Any chance the NTMA can get the names of these ‘john’s’,so that when Ireland is back on its feet we can settle the score.Go some way to justifying these outrageous salaries.

The DoF/NTMA should engage in some foreplay this time,tell the bondholders they have to pick up their money in person,some shenanigans involving national security,power outages may delay the transfer.
Still plenty of time to ‘spook’ the scumbags that hold these bonds,crash the price have NTMA pick them up cheap,but dont grin like the village idiot of Europe and pay it.

“Ireland will likely “have to get back into the bond markets during the course of 2013,” Corrigan, chief executive officer of the NTMA, said at an event organised by Dublin-based securities firm Davy in New York yesterday.”

A type of gathering:
A ceremony, for example, a marriage
A competition, for example, a sports competition
A convention (meeting)
A happening, a performance or situation meant to be considered as art
A festival, for example, a musical event
A media event, a happening that attracts coverage by mass media
A party
A sporting eventhttp://en.wikipedia.org/wiki/Event

Half a million a year,country paying out over a BILLION for Anglo,Corrigan at some ‘event’ in New York sponsored by Davy,all paid for by IRISH TAXAYERS,shame on you Corrigan.Brenan just back from lunch with Davy in London,paid for by Irish taxpayers.Have they no shame.